Higher profits underpin shares boom

Listed companies in Western Australia have delivered a succession of record profits over the past week, providing a solid basis for the strong rise in the sharemarket.

Companies in the mineral commodities and property sectors have led the charge and anticipate continued strong trading conditions.

Nickel miners like Jubilee Mines  Ltd have reported some of the strongest profit results, as they benefit from increases in nickel prices.

Jubilee lifted its net profit by 362 per cent to $107.6 million for the half-year to December 2006.

The company said this result reinforced its position as Australia’s premier mid-tier nickel producer.

Jubilee’s board declared an interim dividend of 30 cents per share, up from 13 cents previously, representing its highest ever dividend payment, though some analysts grizzled that the company should have paid an even higher dividend.

In the property sector, Aspen Group  Ltd announced a 621 per cent increase in net profit for the first-half of the financial year to $55.1 million.

The biggest gain came from property revaluations, though the group also benefited from higher rental incomes and increased funds management revenue.

Engineering and construction consultancy VDM Group Ltd has increased its net profit for the half year by 182 per cent to $5.1 million.

Chief executive John Farrell said the results reflected the company’s growth plan, with the board expecting VDM’s annual net profit would exceed $10 million.

Another winning company was Amcom Telecommunications Ltd, which reported a 200 per cent increase in half-year net profit to $2.3 million.

Amcom increased sales by 49 per cent to $18.9 million, as well as earning $1.4 million from its 20 per cent stake in iiNet Ltd.

In the mining services sector, drilling products company Imdex Ltd recorded a net profit after tax of $6 million for the half year, an increase of 88 per cent.

Imdex said that, based on the company’s performance, current market indications and business plans, its initial forecast of 45 per cent revenue growth would be exceeded for the full year.

Another company with strong exposure to the mining sector is earthmoving equipment supplier Emeco Holdings Ltd, which reported a strong increase in sales and profit for the half-year.

Emeco achieved a net profit after tax of $16.1 million, an increase of 66 per cent. It noted that on a pro-forma basis, after adjusting for the effects of financing transactions associated with its initial public offering, net profit was $34.8 million.

An exception to the good news was mineral sands miner Iluka Resources Ltd, which posted a net profit of $21 million after write-downs and provisions totalling $95.9 million.